There’s no denying that consumer media habits and expectations have fundamentally changed. This includes content being increasingly consumed via computer and smartphone rather than TV, as well as experiential content becoming the next evolution of delivery. Navigating the changing landscape to find success in the media and entertainment industry is often a chaotic, frustrating pursuit.
To capitalize on the business opportunities these changes bring rather than being disrupted by them, here’s what transformations you can expect to face in 2018:
Growth of programmatic video advertising
According to eMarketer, from 2015 through 2019, the share of US digital video advertising that’s transacted programmatically will nearly double. The publication paints quite a different picture, however, for programmatic TV advertising, putting it at just five percent of all TV advertising in 2019. The predicted growth rate, when compared to being nearly non-existent in 2016, is quite extraordinary, however, the relative amount of programmatic advertising remains small. On the other hand, PWC predicts that programmatic TV will represent approximately a third of global TV ad revenue by 2021. Either way, if those growth rates hold true, the industry is in for a wild ride.
Combatting declining box office sales
Box office numbers have been on decline since their 2002 peak according to Box Office Mojo. Whether you attribute this to an increase in in-home, mobile viewing via Netflix or similar channels, theater chains are on a mission to combat the impending doom. As a result, we are seeing the first real changes in the movie-going experience in decades. Theaters are delivering a premium experience with reclining seats, in-theater food and beverage service, reserved seating, and more. These premium features are driving up revenue for the theater but they are still not addressing the decline in ticket sales that is putting pressure on the big studios.
With their recent focus being squarely on box office numbers, studios have been placing more conservative bets on Blockbuster universes or IPs with a built-in fan base such as the Avengers or the recent Emoji movie. This studio trend of focusing on shareholder value over producing original scripts shows no signs of stopping in 2018 when you look at Amobee’s most anticipated movies of 2018 published by AdWeek.
Moviepass, a new theater subscription service, has the potential to offer an interesting solve to the box- office numbers problem. 2018 could be the year where we see much needed change in what has been a challenging time to be in the theatrical movie business if Moviepass is successful.
Advertisers are pushing back against “Fake News”
Consumer confidence in media has taken a significant hit following the rise of “fake news,” causing advertisers to question whether they want to be associated with controversial, extreme or dubious content. As newsday.com notes, as the issue gathers momentum, advertisers are increasingly looking for more control over where their ads are placed and are beginning to cut down their purchase of ads through open exchanges — opting instead for methods that provide more visibility. More advertisers are purchasing ads through “programmatic direct” deals and “private programmatic marketplaces” to protect their ads from inappropriate adjacencies.
Addressing frequency capping for Over-The-Top (OTT) and direct-to-consumer (D2C) offerings
Video streaming revenue is growing at a staggering rate, with no signs of slowing down. According to Digital TV Research, streaming revenue is forecasted to increase from $30 billion in 2015 to $65 billion by 2021, as consumers continue to embrace OTT and D2C solutions for streaming videos. This incredible growth in OTT and D2C-delivered TV content is reshaping the distribution models, consumer viewing habits and advertising.
Specifically, consumers are expecting greater personalization and to engage with fewer, but more relevant, high-quality ads. However, it’s still common for a viewer on an ad-supported OTT to be served the same ad multiple times in the same viewing session, resulting in a less than optimal experience. This telegram.com article points out that as such, managing frequency is a problem that needs solving in 2018 to improve customer experience. One potential solution for this problem is an open DMP to frequency cap across publisher at the device level by ID tags or by more advanced features like household detection.
Virtual reality is giving us a glimpse into the future
Virtual reality (VR) and augmented reality have quickly become a hot topic across a number of industries. The global VR market expects a valuation of more than US$26 billion by the end of 2022 according to a report published by Zion Market Research. And with the emergence of technologies like Facebook 360 and YouTube 360, consumers can interact with content from afar through natural, immersive human experiences. For now, brands are scrambling to see how they can apply this novel technology in a way that enhances the customer experience, builds excitement for innovation, and generates publicity.
With so much change, media and entertainment companies now have a massive opportunity to better serve current and prospective consumers. As we’ve seen significant shifts in consumer behavior and expectations, it’s clear that personalized, targeted and accessible experiences can mean the difference between success and a bust.
